A merchant who offers an item for sale may face significant competition from other merchants to attract and retain consumers. This may be especially true for online merchants (e.g., merchants who sell items via the World Wide Web), because a consumer can more readily “shop around” to determine item prices offered by different online merchants.
One way of responding to this competition is to reduce the price at which an item is offered for sale (e.g., by discounting the retail price for all consumers). Unfortunately, reducing the item price also reduces the merchant's profit, and the reduced profit may not be offset by an increase in sales. To minimize such a result, a number of other techniques have been used to determine an item price for a consumer.
For example, some merchants distribute coupons and/or establish pricing tiers (e.g., via frequent shopper programs) that let some consumers pay a reduced item price while other consumers pay a higher item price. Manufacturers also use similar techniques (e.g., via manufacturer rebates) to determine an item price.
A merchant may also offer an item for sale at a “dynamic” item price. For example, the item price may increase or decrease over time according to a predetermined schedule (e.g., the item price may automatically decrease 10% each week until all of the items in stock have been sold). Similarly, the item price may increase or decrease based on a number of consumers who purchase the item or the number of items that are sold (e.g., the item price is $100 for the first fifty consumers and $120 for all other consumers).
The item price may also vary based on revenue management information (e.g., supply and demand information) as described, for example, in U.S. patent application Ser. No. 09/526,575 entitled “Systems and Methods to Price an Item for a Customer Based on Price Management Data”. Note that the item price may even be adjusted after a consumer has purchased the item (e.g., the item price will be $100 if less than fifty consumers purchase the item and $80 if at least fifty consumers purchase the item via the merchant).
Other merchants offer items for sale at consumer-established item prices. For example, a merchant may conduct an auction and sell the item to the twenty highest bidders.
U.S. Pat. No. 5,794,207 entitled “Method and Apparatus for a Cryptographically Assisted Commercial Network System Designed to Facilitate Buyer-Driven Conditional Purchase Offers” discloses another approach in which a consumer submits an offer, including a consumer-established offer price. The offer may be “binding,” for example, in that the consumer cannot revoke the offer after it has been accepted by a seller (or a penalty may be applied to the consumer if he or she revokes the offer).
A merchant may also vary an item price based on a subsidy to be applied to a transaction. For example, a third party may agree to apply a benefit to a transaction if a consumer agrees to perform a task (e.g., a credit card company may agree to contribute $30.00 towards an item price if the consumer is approved for a new credit card). Some examples of such subsidies are disclosed in U.S. patent application Ser. No. 09/282,747 entitled “Method and Apparatus for Providing Cross-Benefits Based on a Customer Activity.”
Note that with each of these above techniques, a merchant associates an item price with a consumer. That is, the merchant may sell an item to different consumers at different item prices.
The above techniques suffer from a number of disadvantages. For example, consider a merchant who associates a particular item price with a consumer. If the consumer does not purchase the item for any reason (e.g., the consumer is unable or unwilling to purchase the item), the merchant will lose any chance to earn the profit that would result from a sale at that particular price. This may be the case even when the consumer knew of a friend who wanted to purchase the item at that price.
Even if the consumer did purchase the item, the merchant may welcome additional sales at that particular price (e.g., if that price will provide the merchant with a reasonable profit). However, because that particular price is only associated with that consumer, other consumers will be unaware that they could also purchase the item at that price. Note that broadcasting the particular price to all potential consumers might undermine the pricing system established by the merchant (e.g., the merchant may expect that at least some consumers will pay even more than that price for the item).
Even when the particular price does not provide the merchant with a reasonable profit (e.g., the merchant only “breaks even” or even loses money with each sale), the merchant may want to allow other consumers to purchase the item at that price. For example, the merchant may consider the marketing benefits associated with having a consumer refer his or her friends to the merchant's Web site (e.g., as opposed to telling them “I got a good price through this merchant, but you may or may not get the same price”). Moreover, the merchant may want to avoid any confusion or bad feelings that may arise when a consumer's friend visits the merchant (e.g., accesses a Web site associated with the merchant) only to find that he or she is unable to purchase the item at the same price.
A need exists, therefore, for further systems and methods to facilitate transactions with consumers.